[GVI Forex 2]

How You Can Use Currency Crosses to Trade Spot Forex and Carry Trade (follow ups)

How do we know that cross flows are driving the market?

When two currencies move in opposite directions you can assume there are real money cross flows

Look at USDJPY and USDCHF (both up sharply) vs firmer commodity currencies and GBP is up as well once the carry trade unwinds ended.

Currently:

USD STRONGER

USDJPY +2.0%
USDCHF +1.4%

USD WEAKER

GBPUSD =0.3%
USDCAD -0.3%
AUDUSD +0.7%
NZDUSD +1.1%

[GVI Forex 2]

USDCAD 4 HOUR CHART – testing support

As noted, commodity currencies benefiting from a bounce in risk and end, for now, to the carry trade unwind.

As this chart shows, USDCAD has layers of support (tested 1.3743) but is on the defensive as long as it trades below 1.3787/90/1.38

If it trades 1,37-1.38, then keep an eye on 1.3750 to set its tone.

[SF Monedge]

Nice input UsdCad Bobby, you have kept me out of trouble before.  Entertaining long side here at 3760 based on a bit of limited supporting metrics, lets see.  Obviously not intraday participation.

[GVI Forex 2]

Bobby good call in USDCAD

[GVI Forex 2]

USDCAD 4 HOUR CHART – 1.38

While there are layers of (red line) support below the market, the spike high and quick retreat has wiped the deck of buy stops.

As this chart shows, 1.3787 is a key support but as noted, there are layers of (red line) support below it.

In any case, 1,38 will set its tone.

[Belgrade Bobby]

Monedge – most of the time I fully agree with you and your ways of trading, but this time I have to warn you – If below 1.37850 USDCAD become very Bearish on mid term

1.35900 comes to play…

[SF Monedge]

I like the buy side of UsdCad under 3800 and eventually Sterling on the next pass down.

[GVI Forex 2]

USDCAD WEEKLY CHART – PAUSE BELOW MAJOR HIGH

USDCAD reversing after pause below 1.3977

Still just a retracement as key levels are distant.

The move down is consistent with the repatriation argument during times of stress.

A close below 1,3834 would produce an outside day key reversal (questionable how well it works in FX). but 1.38 is likely most important in keeping the bid.

[SF Monedge]

Trying out the buy side of UsdCad in the 80’s here for small gains only.  See the tide turning to the sell side overall in time in coming days.  Fundamentals support the idea, flows are not necessarily exactly when you want them.  Internals (forwards, options, futures, rates, orders, order flows, percents and the rest) are heavily stacked against Canadian Dollar itself overall at present.

[Mtl JP]

USDCAD 1.3790
–
fwiw I do not give much weight to todays Pivot pricepoint
just a personal preference

[Mtl JP]

SF 1:48 // USDCAD 1.3805

this puppy has potential for deepah under 1.3795
puppy has had a rather unusual strong run over last 10 days or so
so a good correction back to a more balanced relationship between canada / us can not be ruled out

fwiw, g/l

[SF Monedge]

Expecting absolutely nothing from The Moscow Fed so I have been buying UsdCad approaching the figure and below.

[Mtl JP]

USDCAD 1.3811

currently confirming USD’s limited upside

[GVI Forex 2]

USDCAD WEEKLY CHART – NEW 2024 HIGH

 

Having traded to a new 2024 high (1.38653, I went to a weekly chart to fimd

1.3896 – 2023 high

1.3977 = 2022 high

as the next key levels on the upside.

For day traders, 1.3850 will likely set its tone with support on deep dips as long as it trades above 1.38 but no stops left unless a new high is made..

Next key even is the US FOMC deision on Wednesday.

[SF Monedge]

Bank of Canada Governor did not provide much verbiage of weight for consideration.  The tone was there is not set in stone path of policy at present, that rate cuts will be dependent on the condition of data as it transpires, and the .25 cut was to stimulate growth and is fine for now.  The bottom line is their policy is stable and not on any razors edge.  Futures are trending down so the proper approach is the buy side of UsdCad unless something profound develops.

That said, the current price area for futures and options are decent to test the buy (sell UsdCad in spot) side if you like rolling the dice, as you could hit a runner.  Buy side of 7325 calls at the money look decent on the delta and such at the moment. So in spot that’s a sell from just above 3800.

[Mtl JP]

USDCAD 1.3790 – and BoC decsion day

09:45 BoC

eager players look primed to try to run the puppy to 1.3850
My degenerate side says : “caution”

Sup 1.3760 / 1.3700

[GVI Forex 2]

USDCAD DAILY CHART – WAITING FOR THE BOC

 

With a rate cut widely expected, watch how USDCAD trades vs. 1.38 as that will dictate its post metting tone.

Key resistance is at 1.3846.

Support zone is 1.3700-50.

[GVI Forex 2]

USDCAD WEEKLY CHART

The following was posted over the weekend in the Global-View Trading Club Weekly Charts

Note USDCAD bounced off the 1.3707 level… last at 1.3772

\

THe focus is on the BoC rate decision on Wednesday where expectations run as high as 80% for a rate cut.

This suggests support on dips ahead of the decision, starting at 1.3707-17.

Targets on the upside can be seen on the chart but 1.3750 and 1.3800 are the pivotal levels on top.

[SF Monedge]

Sterling looks the best to me at the moment from the buy side perspective as it nears 2900.  Not so much on Euro or Aud which would entail greater risk on the buy side this morning.  That said, I still prefer the buy side overall in Aussie in a larger view and do not believe price has gone low enough to change that.  Euro is a sell from higher than current market and not at a price offering good R/R here at 0870.  Prefer buy side of UsdCad today.

[Alan nomadic]

Yep too many Gurus out there…none of them survive as long as Jays Global View.So talking of flows, perfect example today of the relationship between Cable, Euro and EURGBP.
EURGBP dropping hard Cable rising, EURUSD static. Also look at the other GBP crosses GBP/Commodity crosses to see how GBP is being bid across the board.
But see EURAUD also rising hard, so we very weak AUD. Then glance to USDCAD and see that rising, so we have weakness across the Comm FX pairs. Its all connected.

[Alan nomadic]

Thank you Jay & Bobby, I hope my question, and answer helps others as that was the main point of it.Bobby is right that you need to know the pair you are trading, but I have done this for 20 years now and my Wife has more than that…so we cover many markets between us and monitor different methods, multiple strategies and communicate across the desk like in a firm. It is the only way we can stay competitive in this business.
We trade like Jay said, kind of old school some would say, see what is moving, instantly spot what that means about where the flows are, be aware of the day/week of the month regarding Options and key scheduled news, figure out if the flows are going to continue into the next session i.e. will europe to NY continue direction after a pullback or will NY reverse the direction.
If there is surprise geopolitical news or comments and the market moves quickly, you have to know if the move should be faded (usually if its just a comment and the move goes against the flow as it can be creating an opportunity to add even though they make it look like a reversal) and you have to be aware of multiple time frames, especially you have to know where the DXY is trading, where we are in Futures regarding time of month/quarter/year and also what are Bonds doing…oh and what have been the ranges this month, are they nearing their average or do they need a good move to complete their monthly move which can then be faded.
Putting all this together means we were able to jump into USDCAD Long and Short for 40 pips on Friday in what was a very small range day in Euro.Basically you have to love the game, right?Like just now, im writng this…wife says “check gold, im scalp long @2400”), I glance at it, see its at a level of interest and jump in, best signal service there is! (one of many trades so if it doesnt work out its ok, especially as we dont do much before NY session on Mondays, sometimes nothing until after London Fix (Fix is also something you need to be aware, Time of Day…)
Thank you Jay and Bobby for creating this place, I hope you get as much interest as it deserves.
CheersAlan

[Alan nomadic]

Question – Product selection

In these times of low FX volatility, especially in the majors (EURUSD the main culprit) the system one uses is not as important as what products one focuses on.

Generally this is the problem many traders struggle with the most in the current environment. Knowing how to hunt is one thing, but knowing where the action will be is the first step, where do you hunt can be more important than what weapon you use.

Can you say something about how you choose which pair to focus on? Do you check the news calendar ie on Friday there was CAD news and USDCAD gave some opportunities long and short.
Thanks

[GVI Forex 2]

USDCAD 15 MINUTE CHART – DO YOU BELIEVE?

Another example of the Power of 50 as the pause below 1.3750 was followed by some book squaring that sent USDCAD back to pre-retail sales levels.

So, do you believe? This is just one indicator but it raised a yellow flag earlier this week after GBPUSD stalled below 1.3050 and EURUSD below 1.0950.

Otherwise, no change to what I posted earlier, which intra-day says expect support as long as it trades above 1.3707.

My Favorite Trading Secret: The Power of the 50 Level

[GVI Forex 2]

USDCAD WEEKLY – BOC RATE CUT

Retail sales just reported missed on the downside but were for May so limited reaction.
‘
Key focus ahead is on next Wed’s BoC rate decision where a cut is widely expected.

This suggests support on dips ahead of it.

Intra-day expect support as long as it trades above 1.3707.

[SF Monedge]

Canadian Dollar futures are reaching extension conditions on the sell side so the sell side of UsdCad is beginning to look appealing.

[SF Monedge]

I like UsdCad buy side from the 3670/or below zone for now.  Emotional price activity in oil has stabilized somewhat it appears.

[GVI Forex 2]

Pauses below EURUSD 1.0950 and GBPUSD 1.3050, AUDUSD brief blip above .6750 and USDCAD pause above 1.3650 means it is time to revisit

My Favorite Trading Secret: The Power of the 50 Level

[GVI Forex 2]

Post data

USD firmer but so far

EURUSD still above 1.0860
USDJPY staying below 159 (intervention threat?)
USDCAD tested 1,37 post-CPI but did not come close to key level (see update below)
AUDUSD extended fall throiugh .6750 but held .6710 support (scroll to see uodate)

US stocks firmer, again led by Russell

US bond yields back to 4.20% but still down on the day

[GVI Forex 2]

USDCAD 4 HOUR CHART – CPI ON DECK

Next focus is on CPI at 12:30 GMT amid talk of a risk of a July rate cut

As this chart shows, USDCAD is trading with a bid ahead of cpi but there is little until 1.3755 so no key stops nearby.

On the downside, 1.3610-30 is support ahead of 1.3589 low.

This makes 1.3589-1.3755 the key range on this chart.

[SF Monedge]

UsdCad 3620 (which is current market) is the point of control in spot, with 7350 the point of control in futures for Canadian Dollar (which is current market).  Regardless of how markets behave up or down, these price levels will be revisited in August.  My preference is the sell side in spot in the 3680-90 zone at present if/when seen.